Not all breach of contract lawsuits are as cut and dried as you might assume. In many cases, the type of compensation that can be sought depends on whether or not there was a realistic monetary loss connected to the breach.

For example, a manufacturer could order parts and materials from a third party. The other company could say in the contract that the parts will arrive in three days, but they may actually end up arriving in seven days. Clearly, the contract has been broken.

However, if the manufacturer was just restocking and didn’t actually need the parts for two weeks — but wanted to have them on hand in advance, so as to be prepared — the company may not have lost any money. Sure, it’s frustrating that the order was delayed, and the company may look for a new supplier, but it would be hard to claim compensation.

On the other hand, the manufacturer could lose sales because the parts and materials are late, meaning final products cannot be assembled and shipped out on time. In some cases, this could mean losing large purchase orders or contracts with retail centers. This could very clearly cause a monetary loss in both the immediate situation and for the future. It could hurt the company’s chances of remaining in business and give the company a poor reputation.

All of these things are detrimental, and the company’s owner could claim they all happened directly because the contract was broken. In that case, he or she could seek compensation in Colorado for the financial hit stemming from the loss of sales or purchase orders and industry contacts.

If this has happened to you, make sure you know your legal options.

Source: FIndLaw, “Breach of Contract and Lawsuits,” accessed May 04, 2016